Day: January 13, 2023

JOHANNESBURG, SOUTH AFRICA — After three years of closed borders under its strict “zero-COVID” policy, China reopened its doors to allow international travelers in — and Chinese with cabin fever out — a move with economic implications around the world, including in Africa.

On the continent, which counts China as its largest trade partner, African importers who sell cheap Chinese-made goods said they were itching to return to China to stock up while many African countries are also hoping to attract Chinese tourists.

While fears about the spread of COVID-19 caused some countries in Asia, Europe and North America to implement negative testing requirements for Chinese travelers, drawing the ire of Beijing, countries like Kenya and South Africa said they would not be implementing any travel restrictions for travelers from China.

African businesses eye China’s reopening

Markets and stocks around the world shot up with China’s reopening, and African businesses are also hoping to cash in on the world’s second largest economy.

“We are open to going there now and we are looking forward to do that to make sure that we get our businesses back on track,” Samuel Karanja, the CEO of the Importers and Small Traders Association of Kenya, told VOA, adding that the pandemic years have been a “roller coaster” for traders.

“For the past three years, it has been a very difficult moment for those traders because they lost touch with their suppliers. Ideally, the traders could go to China, meet their suppliers or manufacturers, go with samples of the goods that they need to be produced for them, some of them could wait for even weeks to be able to see that the production is completed, and the goods are loaded in containers and they’re coming back to Kenya,” he said.

Karanja said that was how business was done before the pandemic where Kenyan small and medium enterprise owners would travel to Chinese cities including Guangzhou, where they bulk purchased everything from electronics and motorbike spare parts to kitchenware and school stationery. After China implemented its zero-COVID policy however, the Kenyan businesses had to make purchases remotely, often with the help of unscrupulous middlemen who ripped them off.

Denis Juru, president of the International Cross-Border Traders Association in South Africa, echoed this, telling VOA that China’s reopening has lots of advantages for his organization’s members.

“The opening of Chinese borders will boost the African economy as Chinese products are cheap. African traders new to the business will be able to go and make their choices physically. New companies in China will take this opportunity to convince traders from Africa by reducing prices,” he said.

He noted that traveling to China is expensive but said while staying in-country and shopping online is easier and more economical “some companies in China sell the wrong products online. Therefore, the process of exchange inconveniences African businesses.”

Optimism with caution

As for large corporations that do business with China, Christo van der Rheede, CEO of Agri SA, South Africa’s biggest agricultural organization, was more circumspect about the pros and cons of China’s reopening.

“It remains to be seen how this is going to impact on South Africa. Remember, South Africa’s a big exporter of particular commodities, for example coal, iron ore, as well as other agricultural commodities to China. Hopefully this will increase the demand for South African commodities,” he said.

He also noted South Africa needs to weigh the economic benefits with caution around the spread of COVID-19.

“I think economically wise, we’ve seen how the clampdown, the zero(-COVID) policy, has impacted on the logistics, especially import and export logistics, and how that has driven up the cost of shipping throughout the world,” he said. “So hopefully we’ll be able to manage it in a way that will boost our economy and our exports to China, but at the same time we need to manage any outbreak in South Africa very carefully.”

Attracting Chinese visitors

So, what about travel from the other direction: Chinese coming to the continent either for business, to work on Belt and Road infrastructure projects or for tourism?

As soon as the country opened, Beijing was quick to send new Chinese Foreign Minister Qin Gang on his first official visit to the continent on a five-country tour.

In a speech on his first stop in Ethiopia, Qin reassured Africa that China plans to strengthen trade ties and accelerate in-person exchanges.

“First, let us intensify our in-person interactions and connectivity of ideas. The pandemic will be over, and we can see [the] light of hope ahead. … We will expand exchange and cooperation with Africa in various fields and at all levels, including between the governments, legislatures, political parties, militaries and localities,” Qin said. “African political leaders, AU Commission officials at various levels and Africans in the political, business and academic circles are most welcome to visit in due course.”

“We will encourage Chinese companies and people to come to Africa for investment and tourism. We will provide more facilitation to restore two-way personnel exchanges at a faster pace,” he added.

In terms of Chinese visitors to South Africa, however, Rosemary Anderson, national chairperson of the Federated Hospitality Association of South Africa, told VOA the current system leaves much to be desired.

“The Chinese traveler to South Africa has to present themselves in person at an embassy or visa office in China and wait up to months for a visa to be supplied,” she said, noting South Africa only attracted about 93,000 visitors before the pandemic in 2019, out of some 155 million Chinese who traveled abroad.

However, she noted that it was encouraging that Air China has recently started a direct flight between Beijing and Johannesburg.

Anderson said South Africa should do more to attract Chinese travelers, including public and private sector marketing initiatives aimed specifically at the Chinese market, ensuring destination and product information is available on Chinese search engines, and marketing on Chinese social media channels like Weibo and WeChat.

As China reopens to the world, “showing that you are Chinese friendly by, for example, offering payment platforms like WeChat Pay and Alipay, keeping in mind Chinese holiday dates, learning a few key phrases in Mandarin and training tourist guides to speak Mandarin,” would all be useful, she said.

Source: Voice of America

JOHANNESBURG, Finance Minister Enoch Godongwana says international and local challenges continue to pose as obstacles in the growth of the South African economy.

This as real Gross Domestic Product (GDP) grew by some 1.6% in the third quarter of 2022.

Speaking at the Pre-World Economic Forum (WEF) business breakfast held in Johannesburg on Thursday, the Minister said the impact of the COVID-19 pandemic on employment and investment continue to have an impact on growth and warned that the ongoing war between Russia and Ukraine could have a devastating impact.

“The theme [for the WEF meeting], Cooperation in a Fragmented World, captures the combination of economic, geo-political and social challenges that are facing the world. Our common challenges here at home are being compounded by all these risks.

“If the Europeans continue to impose more sanctions on Russia and the war does not come to an end, we are all likely to face a recession.

“In the face of all of these challenges, this government has been clear that rebuilding investor confidence and mobilising investment, is among the chief priorities this government must achieve for growing our economy,” he said.

Godongwana said coupled with these international challenges, economic growth is also facing challenges closer to home.

“There’s a tendency in South Africa to debate…macro-economic theory and which theory is right. You can have the best policy on paper but if you can’t provide electricity, it’s useless. If you can’t deal with crime, your policy can’t work…and similarly with the logistics challenges, particularly Transnet,” he said.

Regarding Eskom, the Minister said an announcement is due to be made next month.

“We want to resolve the Eskom issues as soon as possible. Part of that resolution is to make sure that they have a healthy balance sheet so that they should be able to do what they should do best.

“In my humble view they should be prioritising what they do have…in making sure that [of] the 48 000MW at least 32 000MW are working. That is why it is critical for us to clear that balance sheet and we will make an appropriate announcement on the 22nd of February,” he said.

The Minister said some of these challenges have led to National Treasury to project a real Gross Domestic Product (GDP) growth of 1.6% until 2025 which is revised downwards from 1.8% in last year’s budget speech.

“Everybody wants investment, no doubt about that. It is critical for growth. Together we can achieve a greater growth provided we can deal with some of the issues raised.

“We have Operation Vulindlela whose main focus is structural reforms. Of particular focus on those structural reforms is networking industries. In addition, it is to deal with red tape. We are engaging these issues. I have referred to the electricity challenge and some work is being done to deal with those issues,” he said.

The Minister urged the business people who will be part of South Africa’s delegation at the WEF to work with government to resolve the challenges facing the country.

“We have got to find a solution together. I’m saying that even as we go to Davos, we must begin to say how we work together on all of these things. All these areas I’ve mentioned, there should be a possibility that we could work together,” Godongwana said.

Source: Nam News Network